06/30/2020
Why were not open, our crystal balls are in agreement. 😎
My Damn Crystal Ball
By Nick Reid
This is going to last longer than people are saying.
Re-Opening is not Recovery, it is just the first step.
People are putting too much emphasis on re-opening - and it is going to cause some grief down the line.
There is still a race for a vaccine.
Some local travel will take place this summer. The majority will be drive.
(There’s is talk of a $4,000 travel tax credit - stimulus)
But the industry cannot survive on 30-50% occupancies.
Domestic corporate travel will start back slowly in September.
But pent up desire will not translate to pent up demand. Japan still has a 14 day quarantine for arrivals. Hawaii just changed their 14 day quarantine to a requirement for a negative Covid test at the time of boarding.
By first quarter 2021 we will only be at 30% of usual business.
We will build back gradually during 2021 hitting normal numbers first quarter 2022.
Who will survive? It’s hard to stay.
20% of New York City Hotels will never re-open.
Hilton has laid off 20% of Corporate Staff.
Qantas has laid off 6,000 staff and will not resume International service until 2021.
Travel agents close to retirement whose partners/spouses have employment outside of the travel industry may choose to simply retire.
50% of travel industry staff will be laid off by July. Survival will depend on the $600 per week special allowance being extended beyond July 31. Without it most cannot survive on simple Unemployment Benefits (UI).
UI will need to be extended beyond the now extended 12 months as some will still be unemployed come April 2021.
A second PPP may be available to Small Businesses to use for salary/wage replacement.
So much talent will go wanting for work. Many will turn to independent contractor status feeling there is no other alternative. More “agents” will be fighting for a much reduced pie.
Intelligent travel agencies and companies will look to mergers and cost cutting to survive.
Those who can survive until early 2021 will be the winners.
